April 10, 2018 / 3:02 AM / a year ago

GLOBAL MARKETS-Stocks rally as Xi calms jitters over US-China trade row

(Updates with market reaction to Chinese president’s speech)

By Masayuki Kitano

SINGAPORE, April 10 (Reuters) - U.S stock futures rallied, Asian shares bounced and the safe haven yen fell on Tuesday as Chinese President Xi Jinping promised to lower import tariffs on products including cars this year, helping soothe investor jitters over an escalating U.S.-China trade row.

Xi, speaking at the Boao Forum for Asia in Hainan province, said that China will take measures to sharply widen market access for foreign investors, raise the foreign ownership limit in the automobile sector and protect intellectual property of foreign firms.

Xi’s comments prompted a rapid and largely positive reaction in financial markets, which have been rattled over the past week on fears the tit-for-tat U.S.-China tariffs will explode into a full-blow trade war.

U.S. S&P 500 E-mini futures rose 1.2 percent, while the MSCI’s broadest index of Asia-Pacific shares outside Japan recovered from early losses and advanced 0.8 percent.

Japan’s Nikkei share average climbed 1.1 percent.

“By and large it appears that the speech is more conciliatory than it is pugilistic with respect to how their approach to the U.S. is,” Vishnu Varathan, head of economics and strategy for Mizuho Bank in Singapore.

“At the end of the day the sense is that the political incentives will be for both parties to get to the negotiation table.”

As risk sentiment improved, the safe haven yen came under pressure. The dollar rose 0.4 percent to 107.18 yen, while the euro set a four-week high against the yen..

Reporting by Masayuki Kitano in Singapore Editing by Shri Navaratnam

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